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Would you pay Euros to vote in Greece?

03 Jul 2015, 08:00 | Posted by: Paul Donovan | Tags: Paul Donovan

Greece – still very little intelligent to say on possible outcomes. Opinion polls indicate a close referendum vote, but the reputation of opinion polls has been somewhat tarnished of late. There is uncertainty over turnout, as people may be reluctant to spend valuable Euros to travel to vote.

If Greece is to stay in the Euro, politicians need to be overwhelmingly convincing that it will stay in the Euro – otherwise people will just rush to take money out of the banks as soon as they can. If Greece leaves, contagion elsewhere is via bank runs, and bank deposit levels will need to be watched (after every future economic shock in the Euro area).

Chinese equity volatility is such that economists will condescend to notice it. The declines may matter because equity is more widely owned in China. Repeated policy interventions show the limits on market forces in China. The bias to stopping declines is a troubling – rising equities are not "good", equities trading at fair value are "good" economically speaking.

Euro are service sector sentiment is due to come out, but really they might as well not bother publishing in the current climate. For what it is worth the market expects a modest acceleration.